AMA President Urges Medicare Physician Payment Reform

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imageAmerican Medical Association (AMA) President Cecil B. Wilson, MD yesterday testified before the House Energy and Commerce Health Subcommittee, urging Congressional leaders to reform the “deeply flawed” Medicare physician payment formula. Also known as the Sustainable Growth Rate (SGR), the will trigger a drastic physician payment cut of nearly 30% on January 1, 2012.

“The SGR is a failed formula,” Wilson tells the subcommittee. “The longer we wait to cast it aside, the deeper the hole we dig. It is past time to replace the SGR with a policy that preserves access, promotes quality and increases efficiency.”

In his testimony, Dr. Wilson recommended that a three-pronged approach to reforming the physician payment system be adopted. This approach, he explains, would include repealing the SGR, implementing a five-year period of stable Medicare physician payments, and laying the pathway for a new payment system. A variety of new payment models designed to enhance care coordination, quality, appropriateness, and costs would be tested during this time. The five-year period would also provide time to carry out demonstration and pilot projects that would form the basis of a new Medicare physician payment system. Because fiscal stability is imperative, the AMA is advocating positive payment updates to keep pace with the growth in medical practice costs it anticipates will occur within the five-year window.

“A replacement for the SGR should not be another ‘one-size-fits-all’ formula,” Wilson asserts. “A new system should allow physicians to choose from a menu of new payment models that rewards physicians and hospitals for keeping patients healthy and managing chronic conditions.”

To assist with the process of testing and evaluating payment models, the AMA is working with specialty and state medical societies to form a new Physician Payment Reform and Delivery Leadership Group. This group will include physicians who are currently participating in payment and delivery innovations, along with other experts. By sharing expertise and resources, the AMA believes, physicians can assess the models that will improve patient care, learn how to get programs off the ground, address challenges, and determine the impact of these reforms on patient care and practice economics.